Index fund refers to the fund that purchases all or part of the securities in the securities market included in the index according to the index standard, with the aim of achieving the same income level as the index. Usually, index funds completely track the changes of the index and generally do not make adjustments, so they are generally called passive funds.

Enhanced index investment Because different fund managers describe the investment purposes of their index-enhanced products differently, there is no unified model for enhanced index investment. The only similarity is that they all want to provide investment performance higher than the return level of the underlying index. In order to make indexed investment worthy of the name, fund managers try to maintain the various characteristics of the underlying index.

Extended data:

Index characteristics: In addition to low tracking error, the index characteristics that fund managers consider copying include:

1, P/E ratio

2. Dividend yield

3.β value

4. Industry weight

5. Weight of individual stocks

However, which of these characteristics is more important, that is, which one must be strictly copied and which one can be moderately separated, varies greatly among funds. Therefore, according to an empirical study, the actual operation of most foreign index-enhanced funds is inconsistent with their objectives, that is, they cannot seek higher-than-average market returns only by the average market risk.

Baidu Encyclopedia-Enhanced Index Fund